Risk Management Reports

October, 2000

Volume 27, No. 10

Risk
Communication Again

Is it important to involve our stakeholders in the process of assessing
and responding to risk as we make decisions? I’ve already urged that this
become a key part of the process. Others disagree. A diametrically opposed
comment came from Jack Dowie, in an article in issue 2-2000 of Risk Management:
An International Journal: “Better risk communication has no role to play
in improved decision making.” That bald assertion forced me to review
my own position.

Dowie’s point, as I read him, is that “decision analysis involves raising
the analysis-to-intuition ratio in judgement and decision making significantly
above that which characterises every-day politico-scientific, professional
and lay discourses.” Since “most people’s judgement and decision-making”
are corrupted by biases, preconceptions, and flawed analyses, bringing
them into the equation means, too often, “that ‘risk’ (is) being used
strategically, consciously or unconsciously, to prevent (my emphasis)
discussion and debate being raised to the higher ratio that transparency
require(s), while giving the impression that it was becoming more ‘scientific’.”

I acknowledge his point. He seeks a higher and purer approach to decisions.
Listening to many other voices easily distorts and delays decisions, but
since these very decisions affect many others, don’t we have a responsibility
to bring them into the process, however messy it may become? Can we really
stand above the throng, like all-knowing seers? Democracy is not always
efficient, but it is the best system yet devised.

Luckily I found some support for my position in four recent publications.
The first is from academia. John Shortreed, head of the Institute for
Risk Research, at the University of Waterloo, in Canada, prepared, with
two associates, L. Craig and S McColl, a “Draft Benchmark Framework for
Risk Management,” for NERAM, the Network for Environmental Risk Assessment
and Management. In it the authors summarize the “guiding principles” for
our discipline, drawn from Australian, New Zealand, Canadian and US sources.
One of those principles is: “explicit consideration of stakeholder views
of the acceptability of the risk management options through early and
ongoing involvement in the decision process.” (my emphasis) They go
on to describe the strategic, tactical and operational risks that face
all decision-makers, suggesting that one of the key goals in building
and maintaining the “trust of stakeholders” in the organization is their
“acceptance of operations, programs, decision, and analyses,” their “satisfaction
with risk communication efforts,” and “their acceptance of residual risk.”

They call for a continuing “two-way dialogue” with stakeholders: “The organization
should have a process in place for identifying, communicating and consulting

with stakeholders. Stakeholders can include
decision-makers, individuals who are or who perceive themselves to be
directly affected by a decision or activity, individuals inside the organization,
partners in the decision, regulators and other government organizations
that have authority over activities, politicians, non-government organizations,
the media and other interested individuals and groups. The stakeholder
consultation process should be continuous and included as an integral
part of risk communication.”

Is this over-reach? I don’t think so. We
acknowledge that an organization’s public reputation is its most important
asset in our modern media-inundated world. This means that communicating
intelligently with these groups must be the key to building and maintaining
public confidence. The still-unwinding fiasco of the Firestone-Bridgestone
tires and their use on Ford vehicles is a case of an early failure of
reasonable communication with customers and public regulators. The continuing
news stories and recriminations damage the reputation of two global corporations.
Risk communication suggests that we involve consumer and groups and regulators
far earlier in the process of making operational decisions involving risk.

The other three supporting documents come
from the Conference Board of Canada. The first is Members’ Briefing 279-00,
“A Time to Speak - Strategic Leadership for Effective Corporate Communications.”
It re-emphasizes the “six Rs of corporate communications - having the
right source provide the right information to the right audience, at the
right time, in the right place, using the right dissemination method.”
Karen Thiessen’s “Don’t Gamble with Goodwill: The Value of Effectively
Communicating Risks” (Members’ Briefing 284-00) was reviewed in RMR in
the June 2000 issue, and she has followed that with Case Studies 290-00,
“Ambassadors of Goodwill: Key Insights of Some Well-Known Case Studies
in Risk and Crisis Communication.” She cites three Canadian organizations
that have successfully integrated risk communications in their risk management
programs.

Together, these papers provide a succinct
summary of developing principles and practices in risk communication.
Yes, an active process with all stakeholders opens a can of worms, but
those very worms should be considered the bait with which we attract and
keep public confidence.

For more information on the NERAM paper, contact John Shortreed at shortree@uwaterloo.ca.

For the CBC papers, contact Karen Thiessen
at thiessen@conferenceboard.ca

The (risk management)
framework must be easily understood by risk managers, stakeholders
and other members of the public. Extensive documentation of scope,
methods, and decisions is needed.